223,000 jobs added in December, but what's ahead for wages?

FRI, JAN 06, 2023

TECH, TRANSFORMATION AND THE FUTURE OF WORK

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The employment picture remained strong as we closed out 2022. Despite the Fed's continued efforts to slow things down, the December jobs number came in at 223,000, higher than the Dow Jones estimate of 200,000. Wage growth was a bit lower than expected at 0.3% for the month, but is still up 4.6% from a year ago. Meanwhile, the unemployment rate dropped to 3.5%, 0.2% below the expectation. Stocks rallied on the news focusing on the slowing wage growth as a sign that inflation may be easing.

But a new policy proposal may have a long term impact on wages. On Thursday, the Federal Trade commission proposed a new rule that would prevent companies from issuing noncompete agreements to employees. This morning, FTC Chair Lena Khan was on CNBC's Squawk Box discussing the new proposal. Khan explained that noncompete provisions can prevent employees from pursuing better jobs. In addition, the FTC estimates that the ban would give roughly 30 million workers better job opportunities and wages could rise by $300 billion per year. Khan emphasized the positive impact this could have on the economy. With the U.S. Chamber of Commerce already expressing its opposition, the road to ban employee noncompetes could be a long one.

For more on the world of work, check out our Key Stories roundup below.

Until next time, stay safe, stay healthy and stay in touch.

KEY STORIES

Tech jobs were hit the hardest by layoffs last year

The technology industry led job cuts in 2022, totaling more than 97,000 announced across the sector, according to a report released Thursday from outplacement services firm Challenger, Gray & Christmas. That's up 649% from the nearly 13,000 tech jobs that were cut in 2021, the report said.

Overall last year, employers across industries announced plans to cut nearly 364,000 jobs, according to the report — a 13% increase from the year prior. Still, the figure represents a relatively low number of job cuts in a year. Challenger said it's the second-lowest recorded total job cut announcements since it began tracking them in 1993, with the lowest occurring in 2021.

Job openings hold strong despite rate hikes; manufacturing in contraction

Demand for employment remained high in November as companies looked for workers to fill positions despite worries of a looming recession, the Labor Department reported Wednesday.

The Job Openings and Labor Turnover Survey for the month showed available positions at 10.46 million, down just fractionally from October's total and above the 10 million forecast by FactSet. The JOLTS survey is closely watched by Federal Reserve officials for signs of labor market slack.

Here's how much money it takes to be considered middle class in 20 major U.S. cities

The middle class has been shrinking throughout the last five decades as more Americans have entered either the upper or lower income brackets, according to Pew Research Center.

The latest data from 2021 shows the share of the population in the middle class continues to hover around 50%, around where it has been since 2011. Prior to that year, the share of middle class Americans had been consistently shrinking since a peak of 61% in 1971.

COMING UP

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